Optimization for hierarchical multi-level planning systems using interaction prediction principle

This paper is concerned with the optimization of large-scale dynamic systems composed of interconnected subsystems. The decomposition and hierarchical multi-level approach with coordination is described for linear quadratic problem which has been available for socio-economic and production planning. In particular, we present a general solution algorithm for the two-level optimization using interaction prediction principle. A sample example for which the approach is applicable is illustrated.